Ather Energy IPO: Will it Generate Enough to Climb Up the EV Ladder? Should Ola and Bajaj Worry

IPO of Bengaluru-based electric two-wheeler company Ather Energy Ltd. is scheduled to open on April 28. The price band for the IPO is ₹304 to ₹321 per share. It is India's first mainboard IPO in the current fiscal year.

Business of  Ather Energy

• Ather Energy Limited, incorporated in 2013, is an Indian electric two-wheeler company. It involves in designing, developing, and assembling of electric scooters, battery packs, charging infrastructure, and supporting software systems.
• As of December 31, 2024, the company had 265 experience centres and 233 service centres in India, 5 experience centres and 4 service centres in Nepal, and 10 experience centres and 1 service centre in Sri Lanka.
• As of March 31, 2024, Ather Energy employed 2,454 people, including 1,458 on-roll employees and 996 off-roll staff.
• The company sold 1,30,945 electric two wheelers in Financial Year 2024-25 which shows 20% growth in comparison of 2023-24 sales figure of 1,09,161 units. Its current market share is 11.39%

Key points of Ather Eenergy IPO

Purpose of Ather Energy IPO

Company will use the proceeds of the IPO as follows:

Can Ather Energy IPO help the company to beat its competitors?

The IPO is expected to help the company to expand operations and enhance its competitive positioning. Ather’s success will depend on its ability to scale efficiently and effectively and maintaining technological superiority. As India’s EV revolution is getting popularity, Ather’s future in the public markets will be impacted by challenges of profitability, competition, and market expansion which can be understood by the following points:

• The company has in-house R&D and manufacturing which can help the company to have a greater control over quality and innovation.
• Ather Grid comprises over 2,500 chargers across 230 cities and thus the company has largest charging network in India.
• Dependence on imported components can impact the costs, supply chain and pricing strategies.
• There is growing competition from both established non-electric two-wheeler companies and emerging electric two wheelers such as Hero, Bajaj and Ola.
• Consumer demand and profit margin can also be affected due to uncertainties in government policies and subsidies.
• There is issue of affordability for a large segment of the Indian market due to higher price while Ola is offering its EVs for almost every segment.
• Like many early-stage EV companies, achieving consistent profitability can be a big issue.
• Ola electric currently holds a dominant 42.4% market share, while Ather Energy holds a 12.2% market share

Profitability of  investment in Ather Energy IPO

Grey market premium of Ather Energy IPO is continuously decreasing. It decresed from ₹ 40 to ₹ 5 per share in four days which indicates that chance of listing gain is very less. The listing price can be just around the issue price or 2 to 5 per cent up or down of issue price.